senator -- >> i've make up every morning for "fox and friends." steve, that is right, paula dean will be with us. [captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- bill: this is a fox news alert. good morning. house lawmakers are working overtime late last night to come up with a health care bill that would improve the system without breaking it. a group of moderate democrats still concern with the $1 trillion price tag. that mean to their vacation may have to wait. >> we hope to pass a bill by friday. clearly, now it will not be possible at this point in time. megyn: that is a little ambitious.

good luck with that. çhello, everyone. here is the score card. democrats desperate for a health care bill are now making deals. moderate democrats say they are desperate to protect voters from a bill that could bankruptç us, so they are asking what is this going to cost us? bill: we are trying to keep up with this from washington what came from this late night meeting with democrats? >> blue dog democrats right now are meeting to discuss the proposal they got from democratic leaders. the key thing to know, as you heard steny hoyer say, is that they cannot finish the health care bill this week. he says it is just not possible.

keep in mind, they were negotiating with chairman henry waxman. they had concerns about costs and other issues. waxman apparently made some proposals to their concerns. they say in deals with 10 items on a list of demands that the blue dog democrats have, including businesses having a larger exemption. right now they are discussing the offer. bill, the blue dogsç -- that is their group -- bill: the blue dogs, that is the group of democrats who are fiscally conservative. what is their major issue right now? >> of course, it is the cost of the plan. politics also plays a bit of a role. they supported the cap and trade bill, and they are nervous about çtackling health care now with

midterm elections coming up. >> if you are explaining an energy bill, a health care bill, stimulus, appropriations -- if you are explaining so much, you are not motivating your constituents to say that you are doing a good job. >> of course, health care would be one of the toughest things to explain to your constituents. bill: thank you for that. megyn: we are getting disturbing new details on the terror must in north carolina. police say 39-year-old daniel boyd has an extensive history of terror training. boyd, his two sons, and one other has been arrested.

all are u.s.-born citizens. he allegedly used his home to plan attacks abroad. we will have more shortlyç in what police believe was to the next step. bill: in the meantime, we are learning more about possible developments in the investigation of michael jackson's. the doctor who tried to revive him, we are told, could have given jackson a powerful anesthetic known as propofol. çthis medicine is only to be ud in the hospital. officials believe it cost jackson's hard to stop beating. in the meantime, his physician is remaining quiet.

megyn: another big development in washington where a top official from one of the biggest mortgage companies is making some harsh accusations against two democrats. an executive saying christopher dodd and kent conrad both got a sweetheart deals on their home loans, and this is the new park, that they knew all about it, despite their claims that they were in the dark. stu varney has more. this has been in the news before, which is a no-no as a top official, and now this country wide executive has said what? >>ç that they knew they were getting vip treatment. there are three ways in which you can get a favorable deal from a bank with a mortgage.

number one, a lower interest rate on the mortgage. sure enough, take a look at christopher dodd. he took a $500,000 mortgage on washington, d.c. home. he saved $58,000 over the life of theç loan. in his connecticut house, he received a similar rate and save $17,000. the second way to do it is not to pay any point on your mortgage. sure enough, he shaved mortgage points on those two. number three, you can get better terms. again, he invested both homes as primary residences. that gives you a certain advantage. there are three ways to get financial advantage if you are powerful and famous, and it appears senator dodd did all of

that. he said he did not know he was getting the favorable terms, but the executive says that he did. megyn: how did this executive noted that these senators knew that they were getting these special deals? they have said i tried to get the best deal i could get, i did not know it was a sweetheart deal until thithe press started investigating. now this executive -- i guess this is the loan officer -- said he made it clear to them that this was special treatment? >> we have onlyç seen a tempory viewing of the documents, but if you look at them, one of them is stamped with "f.o.a."which

means, friends of amgelo, the former taop executives. they definitely knew that they were getting special treatment. çmegyn: according to the loan officer, his attorney says that he always made a big deal about them being in the vip program. that is how he knew that they knew they were in it. >> keep in mind, a bank can give you any terms that they would like, it is not illegal. however, you should not be taking advantage of your position. megyn: we will wait to hear more from them. bill: i want to be a friend of

angelo's. he has to have been e-mail address somewhere. megyn: not only is an unethical, it is unfair to everyone else. bill: but if you are offering -- [laughter] we will not even disclose it on national tv. another warning, do not text message behind the wheel. you raise the risk of dying substantially when you decide to text. megyn: if at first you do not succeed, tase, tase again. çand then there is this -- >> i would make a lot of more money if i took this kids tonsils.

bill: coming up, we will talk to a doctor about the president's suggestion about doctors being in the business for money. gecko vo: geico's the third-largest car insurance company in the nation. but, it's not like we're kicking back, now, havin' a cuppa tea. gecko vo: takes lots of sweat to become that big. gecko vo: 'course, geckos don't literally sweat... it's just not our thing... gecko vo: ...but i do work hard, mind you. gecko vo: first rule of "hard work equals success." gecko vo: that's why geico is consistently rated excellent or better in terms of financial strength. gecko vo: second rule: "don't steal a coworker's egg salad, 'specially if it's marked "the gecko." come on people. but now they have new areas where i can find the brands i use every day-- and save even more. so that's what they mean by unbeatable. save money. live better. walmart.

when morning comes in the middle of the night... rooster crow. ...it affects your entire day. to get a good night's sleep, try 2-layer ambien cr. the first layer dissolves quickly to help you fall asleep. and unlike other sleep aids, a second dissolves slowly to help you stay asleep. when taking ambien cr, don't drive or operate machinery. sleepwalking, and eating or driving while not fully awake with memory loss for the event as well as abnormal behaviors such as being more outgoing or aggressive than normal, confusion, agitation and halluciations may occur. don't take it with alcohol as it may increase these behaviors. allergic reactions such as shortness of breath, swelling of your tongue or throat may occur and in rare cases may be fatal. side effects may include next-day drowsiness,

dizziness, and headache. in patients with depression, worsening of depression, including risk of suicide may occur. if you experience any of these behaviors or reactions contact your doctor immediately. wake up ready for your day-ask your healthcare provider for 2-layer ambien cr. megyn: the morning commute in maryland and in a fiery crash. a car carrying three people

slams into a street sweeper. all three in the car died. the street sweeper driver escaped with minor injuries. police are hoping autopsy results will explain what caused this. >> they drove into the path of a street sweeper vehicle that hit it in a t-bone fashion, forcing it down the road. megyn: police are still identifying the people who died. bill: we want to get back to our health care countdown. doctors are up said after president obama said doctors may put patients under the knife just for money. ç>> if you come in and you hava bad sore throat, or your child has one, the doctor may look at

the reimbursement system and say, i will make more money if i take his tonsils out. that may be the right thing to do, but i would rather have the doctor making the decisions based on whether you need your kids tonsils out or whether it makes sense --ç maybe they have allergies, something else that would make a difference. bill: and joining me now is someone who represents over 12,000 ent's. what did you think of his remarks? >> we thought it was an unfortunate example to suggest that a physician would remove a child's tonsils solely in order to make more money. that is offensive to physicians to work hard every day in order to improve the public's health.

we were dismayed. many of our members send us feedback, so we thought it was important to directly address the remarks, especially since we have been actively participating in health care reform. bill: in my view, he just tried to simplify the argument. does he have a point, that the system does reward certain procedures with more financial benefits than others, in essence, making doctors more money? >> i think that is a difficult argument to make. there is a physician shortage across the country. most are busy already. there is so much work to do and not enough time. i do not think most physicians

are consulting feeç schedules. most physicians are trying to do what is best for their patient. bill: if you do not pull tonsils, the way i understand it, you may have to treat them for years for other complications. >> removing your tonsils it is an intervention that has cost the association with it, but not treating infections can resolve and parentsç missing work, kids missing school, costs associated with medical costs. our main concern is not to debate with president obama about a tonsillectomy. we are interested in health care reform and patient care. to that end, we support evidence-based decision making,

wherever possible, but that is not always the case. you have to incorporate individual patient needs and utilize the expertise of physicians. that is why we go to medical school. bill, that goes to the heart of your concern. from what i -- bill: that goes to the heart of your concern. from what i understand, this would get in between the relationship that you would have between yourself and your patient. perhaps you can explain to us how this would change the way you work. >> we are concerned president obama supports the development of what is called an independent medicare council. this would be a small group of individuals that are placed in the executive branch that would determine medicaid policy

without judicial review there is the potential that practicing physicians and patients have no input and how these decisions are made. it would significantly reduce transparency in theç system and also allow the executive system to change the health-care system. bill: if you were seeing me as a patient, how would that affect our relationship? >> if had they make certain determinations that certain treatments are not allowed, or maybe you are not even allowed to see me as a physician, it would have a lot of impact. and what options you have. bill: some in your possession -- profession have been called a greedy. what is your reaction to that? >> it is frustrating.

physicians are very dedicated to patient care. in any profession there are people who are greedy. in the medical profession, you are talking about a very small percentage of people. instead of trying to change the whole system in order to get these few people, we need to find those people and scrutinize that, just like any other industry. bill: thank you. megyn: why is everyone bashing the doctors? they are the ones helping us. i know quite a few of them, and they are not rich. it costs a lot of money to get there. moving on, a group of suspected terrorists have been rounded up on u.s. soil. we have a live report coming up on the investigation and the

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from now, a senate panel could put sonia sotomayor one step closerç to the supreme court, d it is a big step. the senate judiciary committee is set to vote moment from now on her nomination. if it passes through committee, her nomination had to for a full senate vote. shannon bream is on capitol hill. is this woman going to be our next supreme court justice? >> it seems to be a foregone conclu.99$(lc@&c+ the democrats are in the majority and they will override the both of the republicans. there is one republican who will be voting for her, lindsey gramm. he made a long speech how he said it would be much easier to get in line with republicans and vote no, but he continued to say

that other actions have consequences, and he said that she answered the questions and the way that i wanted her to, so i am going to vote for her. so it looks like all of the republicans are going to vote no. megyn: is interesting how the democrats and republicans have split down the middle. we have both been to hearings. judge sotomayor seemed to defuse much of what the critics had to say about her. i guess it is tough to call in a lightning bolt round, but she got a couple of points. so why are these republicans still saying they are opposed to her? >> there were her speeches, the wise latina woman, and, among

others, and they said that she did not sound like the person she sounded like on paper. theç answer is to not match upo what we expected leading up to the hearing. after the hearing she released more answers and they said we feel like she is flipping back and forth. that is what scares us month. here's one senator who is voting no. >> judge sotomayor rendered certain decisions, gave certain speeches, gave testimony that was contradictory in certain ways. it is tough to decide howç she will decide cases. >> we expect that this will go to the full senate floor within one week, and there is little question that she will be confirmed. a number of republicans have said that they will vote yes when it gets to the entire senate vote.

bill: in a moment, it appears a diagram for building a nuclear reactor. it is actually the complex democratic plan for health reform. take a good look at it. and a major-league free-speech fight today. megyn: and a horrifying crash. the car flipping an erupting in flames. the driver lives to tell about it. what was going through his mind? we will ask him when he joins us live. (announcer) you can make a bigger difference in the world.

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bill: welcome back, everybody. seven men accused in a plot to wage holy war, and they lived in the u.s. çdaniel boyd and three others

shown here, among those accused of taking part in military-style training and planning an attack overseas. how did boyd allegedly get involved in terror overseas, marianne silber requestssilber? >> they gained some intelligence under the freedom of intelligence act. daniel boyd is the father of two and is a contractor. he and his father was in pakistan in the 1980's and received some training and even fought against the soviets. they say he brought that turning back -- training back here, including his sons. bill: what are the suspects at

the moment, what are they being charged with? >> the suspects include his son and two other individuals. a federal indictment says there are charged with providing material support for terrorism. all sell conspiracy to maine, kidnap, or kill others abroad. bill, thank you. that story is still developing. -- bill: thank you. megyn: the folks currently lending us all the money in stimulus are getting worried about their investment. we showed you how top u.s. and chinese officials are meeting to discuss economic cooperation. remember this? those meetings involve timothy geithner your reassuring the chinese that we are working hard to cut the deficit.

china currently holds more than $800 billion in u.s. treasury bonds. bill: tim geithner isç the treasury secretary dealing with an economic problem of his own at home. he has been trying to sell his home since taking his new job in washington. he put the home on the market for $1.6 million in february. in may, he reduced the price by $60,000. now he is choosing to rent out the home for about $7,500 per month. he purchased the home in 2004 for $1.6 million. five years later, he wants to break even. megyn: that is a very nice area. you can get a very small piece

of land. çdemocrats own house, and they plan to exercise that power, even how republicans communicate with their voters back home. some are accusing the democrats of censoring their messages to voters back home, to 91 republican the use of a chart that details the complex health care plan, and telling another congressman have the could and could not describe the health- care reform bill to his constituents, saying -- congressman john carter is a member of the appropriations

committee. he is the one who had his message changed by this supposedly bipartisan committee. he is my guest. you are not happy about this. they have no business telling you how to speak to your folks back home. >> it is a free-speech issue. this is political correctness run amok. we have to use their talking points for we cannot talk to our folks back home. when i saw that, i was offended by it. it is not the right thing. the american people expect to hear from their members of congress, the way that they want to speak. megyn: what they said to you was it you wanted to call in government health care plan, then they said that you could either call it a public option

health care plan, or just health care plan. but you cannot include government-run. whether you are for or against the plan in the house, by democrats, is there any question that there will be in government-run option provided? >> absolutely. their new plan is government- run. you can see all of the agencies in there that will help the government run this. megyn: it will literally be government-run. i understand the language they were proposing comes directly from nancy pelosi, barack obama? you assume these are the terms that they have polled on, and they test better? >> this is big brother or big

sister telling you what you can and cannot sayç. the constitution does not allow that. megyn: what is with this franken commission? they get to approve or disapprove what you mail home to your constituents? >> the one thing to want to avoid, and i agree with this point, is not to make it political. you cannot say, we'll elect a republican. this is not a political document. it is a communications document on policy, but how we describe the policy is free speech. megyn: can they shut it down altogether? i haveç heard this is an advisy thing. as a practical matter, is it? >> if they tell you that you

cannot use the language, you cannot use the language. the only other way would be to pay for it yourself, or to use campaign funds. megyn: is this something new, sir? i know that nancy pelosi has referred to "new republican majority." it is not like identifying the opposition by name is anything new. >> i have talked to many people and they say this is brand new. nancy pelosi said that we have a culture of corruption. the previous chart, by the way, with hillary-care was approved

by republicans and democrats in the 1990's. this is a change. megyn: i know one of your colleagues wanted to include a direct quotation from president obama when he was talking about health care, saying that maybe you should know that you are better off not getting surgery, but taking painkillers. that was controversial among seniors. so you cannot use that either? >> that is right. quite frankly, are they trying to hide from what their president said? that is the issue. it is all about and airline mckean used -- their language being used. megyn: if you go to appeal this ruling, it is really self-

defeating because it takes a long time, and even if you win, you lose because your message is not out there. >> in this world that they have created, all of the bills are rushed and you do not get them until the 11th hour. to get your message out çtimely is critical. things are moving way too fast do not make suggestions. the american people need to be able to hear quickly. if they delay your message, it is just as bad as killing it. megyn: they know you are a republican, and they know what your views are. they understand that you are part of the republicans. >> that is right. i clearly identify what party i am associated with, and so do all of the rest of the members.

if you interfere with our message and you have to do that by using pelosi-speak,ç that is not right. that is against the first amendment. bill: i think he said you are welcome. thousands of protesters taking to the street bowman that israel does not downtown to pressure by the president. that is the u.s. president there are talking about. megyn: and they may have set a record in the month tourist town, but it is nothing to brag about. why this snake is making so much news. bill, and spank the -- bill: spanky spangler is alive. this is the aarp...

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on the top of a dirt hill. miraculously, he made it out alive. he is in the hospital, with only minor injuries, and he is with us this morning. how are you doing? >> doing pretty well. i was inside, the car was still on fire. i should have made the jump. we had a few complications. bill: but you are okay? >> yes, i am ok. i had a concussion. i have never had one before. bill: you have never had a concussion until now? >> no, i have done 22,000 stunts, and i have only been in the hospital three times. bill: was the ramp and not high enough, was the speed not high enough?

>> there were a couple of things. we build our ramp in another location and it may have changed a couple of degrees. when i came off the ramp, i just came up short. usually i have some safety measures in there, but this time i didn't. bill: you have jumped a distance of 328 feet into water before. a couple of other things -- this is you in a yellow car taking out buses. why? >> we try to create new stunts every year, and that was one of them. bill: you also don't outç of a hot air balloon into a plastic

-- jumped out of a hot air balloon into a plastic mat. how was that? >> it was pretty crazy. unspotted the landing, and i made the jump. bill, can you see the tv? look at yourself. -- bill: can you see the tv? you also jumped across a river. that was a world record. >> that was across the rio grande river. we were doing it for a show called "world's greatest stunts" and we want to do something different. çthey picked the area and i sad that i could do it. that kind of came apart, too, but i walked away.

bill, i am sure you get an adrenaline rush, -- bill: i am sure you get an adrenaline rush, but what is it about this? >> there are not many daredevil's, stunt men left, and it is a great feeling of freedom. bill: great job, but stay safe out there. i know that you are going to montana next to work on this stunt. good luck. thank you. the youngest green beret ever to serve in the military, by the way. megyn: he is brave. new fallout from the arrest of a harvard professor from his own home. think this is over? think again. what one lawmaker is demanding from president obama.

bill: your vanity, could it come up with a proposal to help health care? megyn: and the princeton review releasing its annual report of the top party schools. .

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bill: we have the study today that sides of the extreme dangers of texting while driving. researchers put video cameras in the cab of long-haul trucks. the collision brisk wind up 23 times. in the moments before a crash, the truck driver spent almost five seconds looking at the

phone. the study also says it applies to regular drivers. only 14 states have banned texting while driving. imagine 70 miles per hour and you are distracted for 10 seconds. anything like that can lead to a major collision. states across the country are pushing for more legislation to try and fix the public's attention on trying to make sure you're safe on the road. do you see it? megyn: what are you going to do? you cannot control people. defense secretary robert gates making some news today in a surprise trip to iraq. he is getting a firsthand look at how the military mission is going. david piper spoke with secretary gates.

david, what did the secretary tell you he is hoping to accomplish? >> yes, he said it is a listen and learn trip. this is the first time since the june 30 agreement in which iraqi troops take the lead in security here. he has been speaking with iraqi generals and u.s. generals at this base before billing to baghdad. he wants to see what the security situation is and how he can help in the future. the other major issue in iraq is between the arabs and the kurds. there is some friction. both sides hope to control. he is talking to the iraqi government in baghdad, hoping to resolve the issue. megyn: thank you very much, david piper. bill: we have been hearing about the house plan to reform health care. now it is the senate's turn to the senate may be close to a

deal. what is in it? why one of the main provisions the democrats were looking for maybe absent. megyn: politicians love to talk about full disclosure. this mayor is accused of disclosing too much about himself. is he violated city rules? kelly's court is on the case. >> nothing beats walmart's unbeatable prices... but now they have new areas where i can find the brands i use every day-- and save even more. so that's what they mean by unbeatable. save money. live better. walmart.

[captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- megyn: they planned to vote no. only lindsey gramm says he plans to vote for the nominee. as you may know, democrats themselves changed that informal policy over the past few nominations. most of the republicans are following the democrat's lead. we will see how many votes she

gets or does not get as the senate judiciary committee issues its vote on her, sending her nomination to the full senate floor, where the white house is hoping she will be confirmed by more votes than chief justice john roberts was spirite-- then chief justice jon roberts. this is a fox news alert. senators could be closer than before to a deal on health care. you know they have been working overtime to try to get something done. it is possible. that is the news we're getting this morning. we begin our 10:00 a.m. howeveur of "america's newsroom." i am megyn kelly. bill: i am bill hemmer. who will bear the brunt over the overall plans?

senior citizens. megyn: mike emanuel is apt the white house. aarp has to be on board with this. they want seniors to support this plan. the aarp does not necessarily speak for all seniors, what is ththe white house and lain for? >> robert gibbs says this continues to campaign for health care reform. he says the president will continue to have a campaign for health care reform until he has a bill designed to give the aarp is a huge group of senior citizens in this country. their influence is huge. the white house feels like they want older americans on board with this. there's a lot of concern with older people in america about how this may impact of their health care.

will there health care diminished as a result of health care reform? we expect the president to take questions from aarp members. megyn: the president got an endorsement from the american medical association. then we started to hear from a bunch of doctors but the ama should not a looked at as a group that stands for what all doctors want. is this similar to the aarp and seniors? >> the group is huge, 40 million people. it has deep pockets. there are people who will say it has a liberal agenda, that it is for bigger government, that it is for larger government spending. there are conservative seniors or older americans that do not think the aarp for its them. they think this is a natural fit for what the obama

administration is doing. a lot of older americans do not feel like this group necessarily represents them. megyn: what is a tella-town hall? >> it will be streamlined on the aarp website. they will be taking questions that were sent in from aarp members. there will be an aarp moderator asking questions to the president. you will have the opportunity to watch it on mine if you are so inclined. megyn: thank you, like the menu at the white house. bill: the chairman of the house judiciary committee responding to criticism that congress is moving so fast on proposals so complex that lawmakers do not have time to read the legislation. here's what he said. >> i want these members to g

et up and say read the bill. what good is reading the bill if it is 1000 pages and you do not have two days and two lawyers to find out what it means after you read the bill? bill: at the white house, president obama not following through on his promise to post bills online for five days before signing them into law. the white house only making preliminary bills public before they go for a vote on the hill. megyn: what is the point of reading the bill when it is so long? who has time for that? bill: cookouts and campaigning. megyn: what are you going to do? that is enough. in the senate, one proposal to help pay for health-care reform

is now on using the late-night comics. one lawmaker proposing a tax on botox and other cosmetic surgery procedures to help pay for the new bills. the senate finance committee tossed around the deal. max baucus says it is probably not going to happen. i do not know why theyrejected it. maybe that is not one to cover the $1 trillion cost. to knows? the 10% tax would apply to cosmetic surgery that is not medically treated like a face lifts and hair transplants. the lawmakers did not think it was a good deal. bill: we know the race is on to get ready for a possibly deadly return of swine flu. the national institutes of health announcing eight tests

across the country. these vaccine trials began only big from now. one of the test sites will be emory university in georgia. how are these trials going to work? >> beginning in early august, emery university will begin recruiting up to 200 volunteers, healthy adults, including people 65 and older, for the initial trials. if they determine the vaccines are safe, they will also add children to the study. they are testing for the effectiveness and also trying to determine the proper dosage. it is entirely possible by the time you get vaccinated for h1n1, you will need two shots. one is to prime your immune

system and one is to boost your immune system. bill: what is involved in producing the vaccine? >> the primary product that they use in these vaccines is developed by injecting a strain of injectingh1n1 -- injecting a strain of the h1n1 virus into chicken eggs. it produces 1/3 of the dosage you would ordinarily expect from seasonal flu. they are getting additional samples from infected patients. bill: they are testing vaccines and other parts of the world. we did a report on this yesterday with a reporter from london. how does this play into what we are learning from overseas about how this can protect us? >> they are fast tracking the testing in london. they have begun the first human trials in australia. australia is south of the

equator. they are in the heart of lu flu season to they're finding that the transition rates are high. i have not seen the virus mutating into the more deadly form that many researchers have feared. researchers in the u.s. want to be prepared for the worst when h1n1 makes it way back to the northern hemisphere. they want to be prepared. bill: something tells me you will have a busy fall. >> i am sure i will. bill: thank you. megyn: president obama, harvard professor gates, and sgt crowley may be ready to share a beer this week. they will probably not share the same feelings in who was right and it was wrong. now a top lawmaker is getting involved in this. what he is formally demanding of

president obama. bill: newly released data shows the co-pilot of the fatal commuter plane crash was clearly ill before the plane took off. why she failed to call in sick. megyn: an oregon man you're under fire for fashion choices. what he was buried in front of the town's children -- what he was married in front of the town's children and evidence that the town may not be as progressive as he thought. geico's been saving people money on car insurance for over 70 years. and who doesn't want value for their dollar? been true since the day i made my first dollar.

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bill: new information on the story we have covered four days on "america's newsroom." the co-pilot of that fatal plane crash near buffalo thought about calling in sick but did not want to pay for hotel rooms. investigators are looking into how the city may have been compromised. the february crash killed all 49 people on board. new data showed the 24-year-old

co-pilot could be heard sniffling and sneezing. she was making about $23,000 per year at the time of the crash. colgan says they do not condone pilots flying when they are sick or fatigue. megyn: president obama sitting down for a beer at the white house with harvard professor gates and sgt crowley this thursday night, hoping for some closure. president obama initially accused the cambridge copse of acting stupidly while investigating a break-in at the professor's home. that ignited a media firestorm, resulting in the president having to dial that back, but not apologizing. and the whole break in was not really a break-in. it was reported by a neighbor to

the neighbors 911 call has just been released . megyn: professor gates was arrested for disorderly conduct. he accused the officer of racial profiling. one member of congress is demanding that president obama apologize for the shots he took at the cambridge police. the republican from michigan is my guest now. we kind of thought this was just about over. we heard the 911 call. the woman did not mention anything about race. they are going to have a beer on thursday. why is that not enough for you? >> i do not think it is enough for the american people. what you have is a situation

where the president had a friend involved in a local police incident. the president admitted that he had a bias and prejudged the officers' conduct. that is not acceptable behavior by the president of the united states. if it is allowed to stand, that principle will be set in place. then the question becomes, who will be next? megyn: sgt crowley is game for the beer at the white house. your point is that even if it is okay with him, not to mention professor gates, that the american people need more. >> it is the principle that has to be defended. the president cannot do this to a private citizen. that is the fundamental goal, to make sure the principle is of health. the president admitted bias.

from officer crowley's point of view, yes potential legal ramifications to agree that he overreacted. the officer has maintained that he has not. this is something he should not be coerced into changing unless it is of his own volition. megyn: when the president came to the microphone on friday, he dialed the the part about acting stupidly. as for your second point about whether sgt crowley and the cambridge police overreacted, not so much. i think we have the sound bite. >> in my choice of words, i unfortunately gave an impression that i was maligning the cambridge police department or sgt crowley specifically. i could have calibrated those words differently. i continue to believe, based on

what i have heard, that there was an overreaction in pulling professor gates out of his home. megyn: what is your specific objection? >> the substance of his remarks remain the same. he prejudged the officers' conduct. this is an officer trained in diversity. this is one that trades others about how to handle incidents like this. to say that he acted stupidly is to ensure his conduct. to have him be judged by the president of the united states -- we should not allow this to stand. megyn: you are introducing a resolution in the house demanding that the president apologized. >> we're calling on the president to admit that he prejudged the officer and take

back the statement. from my point of view, if the congress is a separate, equal branch of government -- there will be no effective check and balance. megyn: what is your response to those who would say, don't you have anything better to do right now? we have health care reform right now. we have an economy in shambles. serious unemployment. for those who say, can you keep your eye on the ball and let them have the beer and move on, what is your response? >> they should bring that argument to the president who has raised this issue and is continuing to pursue it. in fairness to the president and everyone else, we can do many things in congress have the same time.

this is a congress that can do many things and the president can do many things. one thing you should never do is prejudge a citizens' actions when you admit bias and a lack of the facts. megyn: thank you. bill: there is a lot of arm- twisting on the hill and a lot of deal making behind closed doors on these committees. the senate could be on the verge of a major breakthrough. that has nothing to do with what the white house has wanted from the very beginning. senator judd gregg is here to tell us about that. megyn: the lights, the glamour, the action. there's nothing like a trip to las vegas. the governor of nevada says no one is gullying, and he knows exactly who and what is to blame -- he says no one is going and he knows exactly who . [ female announcer ] does your dishwasher suffer

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bill: about 245 miles above the earth, endeavour is about to seal the deal with the international space station. in a few moments, the shuttle will close the hatch. in three hours, they will head toward planet earth. the crew conducted five space walks and successfully replace batteries in the space station's solar panels that keep the power running. megyn: where is the picture? bill: endeavour will spend three days in orbit after this.

the international space station is 87% complete. that is major success for nasa. hats off to them. >> this is all for the taking, all for the pillaging. >> think of me as your live coach. >> this is my vacation, t oo. do not drive me down. megyn: [laughter] that is the slogan that sums up the fun times in las vegas. what happens in vegas stays in vegas. cities like beggars are no longer the top destination spots, at least not for government agencies. government agency staff's often

hold meetings in such places. now the governor of nevada is accusing the fed's of putting his state on the blacklist. >> good morning. hotels like the grand sea resort in reno may have great swimming pools and conventions centers, but the image has become somewhat of a liability as government agencies cancel conferences at destinations like this to make it look like government bureaucrats party on the taxpayer don. -- on the taxpayers dime. >> there have been four cancellations of government related meetings in orlando. >> vacation and convention hotspots in dealing with cancellations by federal

agencies like the u.s. department of agriculture, and the u.s. forest service. the health and human services official apologized to a top las vegas hotel, explaining they had to make plans on having the meeting in phoenix. >> it is unfair when you take a perception and you blacklist a city or a state based on that perception. >> the governor of nevada blames president obama for suggesting in february that las vegas is linked to corporate excesses, which has hurt the state's struggling tourist industry. >> $100 million of the economy has disappeared. those are jobs. those are people's lives that his words of testeaffected. >> the white house insist that such decisions are based on a

cost-benefit analysis, rather than the locations reputation. some members of congress are calling for laws to prohibit what the governor is calling destination discrimination. megyn: thank you. bill: i still like a halo. i am the funny one. it depends on the day. in a moment, a secret group of americans apparently plotting terrorism on targets overseas. who they are and where they were planning to strike. nomegyn: in today's kelly's cou, if you are elected to public office, should there be a dress code? >> this template is inappropriate. what are we having this discussion?

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bill: we're watching a court hearing in wichita, kansas. the man accused of gunning down abortion dr. george tiller is due in court. the doctor was shot to death on may 31. he was attending church on sunday morning in wichita. he was controversial because he performed late term abortions. the 51-year-old is charged with one count of first-degree murder and two counts of assault. he has not yet entered a plea, but that could change today. we expect that to happen today.

megyn: why don't we head to outer space? the astronauts are leading the international space station. >> to have representatives from all the international partners, which made it a very special event. we wish you all a safe journey for what is left. good luck as we head back home. thank you. >> thank you earn mucvery much. we're happy to help you. megyn: you can cure the discussion between some astronauts high above the earth as they come back to what we expect should be a keros welcome to they have some technical setbacks.

one of the astronauts' space suit delayed things. they got the job done. we have talked about house democrats. what has happened on the senate side? the finance committee is edging closer to a significant breakthrough that has bridged moderates with some major changes which they believe might give this thing a chance of getting through. republican senator judd gregg is a remember of the committee. -- is a ranking member of the committee. am i reading this correctly? the provision for a government insurance option may be taken off the table? is that what they are considering? >> that is what they have discussed. i was in these meetings before they switched to the finance committee only. before that point, a proposal was on the table that would take the government option off and

replace it with something called a cooperative. that is a step in the right direction for those who want to reach a bipartisan resolution. bill: i find that astounding. would that have the support of the white house? with the president sign that? >> i cannot speak for the white house. if it is done correctly, it can be a positive step toward getting a resolution on one of the key issues, which is at the center of the contentiousness here. it leads to rationing. it is not a good approach to take. bill: even some democrats on the senate side are wary of a government plan because they are afraid it will get too large and

drive the deficit higher. do i understand that correctly? >> there are some folks on the other side of the aisle have that view. the problem is very simple. the numbers do not worked. if you extend coverage to an additional 47 million people and have many trillion dollars of cost to do that, how do you control costs? it becomes very difficult to do you are almost guaranteed you are headed toward rationing and price controls. that is what governments do when they want to control cost. bill: is this a significant breakthrough, if they removed that from the committee? >> it would be a big step, yes. bill: would you vote for it? >> i would have to see the rest of the bill. this is a massive matrix of a bill. my bottom line is that we cannot radically grow the government.

we cannot use the stalking horse of health care to expand the government in a radical way and passed on to our kids a huge debt that would basically bankrupt them and our country. i want to see what they're doing to control cost. it is the philosophical difference that we have. it would be a step toward bipartisan resolution. bill: you said something in your first answer about the co- op. without getting too deep in what you describe as a matrix of a plan, how does become wha-- how does the co-op work? >> we have it in different states. basically, the patients on the business. the health insurer is owned by the patients.

it is like an automobile mutual fund. it has worked in a variety of the for ways. it is an attempt to have been a way -- it is an attempt to have a different option. it is basically a patient owned insurance package. bill: you have my sympathy, by the way. i think my head would explode during these committee meetings. during the late-night sessions, i have read that cookies are brought into the room to give you fuel to keep talking. good luck to you. i know what your concerns are. control the costs, make sure most people are injured, and keep the cost down. we will see if this is a deal breaker. judd gregg, thank you. >> thank you. bill: it is the school report that makes every parent just a bit nervous.

we will tell you which college campuses made the annual list of who party is the most. megyn: how would you like your scantily clad mayor to address your children on leadership? would it matter if your mayor was transgendered? tempers are flaring in kelly's court , next. f are you receiving a payout from a legal settlement

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bill: this is a historic mission. 13 astronauts on board the international space station. that is the largest number of people that have had ever. endeavour will close the hatch at 1:00 p.m. later today. it will be back on mother earth on friday. megyn: kelly's court is back in session. on the docket today, a transgendered mayor in oregon coming under fire for addressing town children in a miniskirt, a tank top, and high heels. stu rasmussen is the nation's first transgendered mayor. he said it was very hot, a 90

degree day. the head of the group invited the mayor to speak to the children about leadership. now the mayor is threatening a lawsuit. we have called in our fashion police. lee armstrong and mercedes colwin, good morning. it is confusing for many reasons. this mayor has apparently transitioned on the top, but not on the bottom. the mayor goes by the pronoun he. he appeared as a she. >> do you have a flow chart? this is tough. megyn: one of the parents complained and said the mayor was in violation of the cities

dress code. the mayor says that is grounds for discrimination lawsuit. >> he is clearly happy with himself. he has the new equipment upstairs and he is trying to show it off. the problem is that he is addressing children. during his official capacity, during the workday, and he shows up wearing that. it is completely inappropriate. it is totally inappropriate. do you need a dress code to tell you that? no. the dress code specifically says no miniskirts and no tops like the one you are showing now. it is incredible to me that the mayor would take the business and that either he did not know what the law was or that this was ok. that is just planin stu-pid.

megyn: this woman that complaint is the head of the group that asked him to speak to the children. she says the children were very respectful, but their faces were shocked. mayor stu rasmussen was in a bold outfits, revealing much of his bosom, shoulders, and back. >> i cannot believe that lee is upset about this. he just got out of his hot pants and stilettos. setting that aside, this is the calling card that the mayor gave to voters. he was elected. this is the same outfit. this is a similar outfit to what this gentleman was probably bring that day. this did not stop him from getting elected. he raises a great point because

this organization that he brought to that day was all about tolerance. it does say you have to be tolerant. that was the platform this organization had. here is an individual who has a gender identity, who is protected under the discrimination law. he probably h-- it is protected under the law. he has the gender identity squarely within that. megyn: he said this group was supposed to be celebrating diversity. instead, they took a public position of intolerance. if this woman goes forward with the complaint, he is getting ready to file a civil rights discrimination lawsuit. >> the before and after is necessary to the legal debate. you use what you have. shame on him for using the discrimination card.

i cannot think of a more tolerant town. they elected this man in a landslide when they knew everything about him. now he is going to say he is discriminated against. he is not. he is told that he violated a dress code. what is his response? we are obviously going to have fun with this. his response is a big deal. he said he did not care what the law said. that is not the way to act as a mayor. for that reason, he should be ashamed. megyn: that is what he said, mercedes. propofol on tuesday, let's not make ourselves look foolish to the rest of the -- he goes on to say, let's not make ourselves look foolish. now the community is not happy.

here's one sound bite. >> very low plunging neckline, spaghetti straps, and open at the back. this was a business meeting. this was not his free time. i wai would suggest he was dresd like a female. >> first of all, he is going to say, would this have happened if i did not have a gender identity? he will say, look at all these other women that probably dress similar to me, but they were not criticized and they were not brought up on charges. with respect to the dress code, have you not seen some of these local officials who have dressed inappropriately? megyn: she raised the point.

the man is complaining because the mayor is transgendered and addressing myself. the woman complains about confusing children. -- the man is complaining because the mayor is transgendered and is dressed like that. >> he is in a micro mini skirt. he changed it the way the rooms are arranged upstairs. megyn: he says he identifies mostly as a heterosexual male. he says he has a girlfriend. he says he always wanted cleavage. >> he goes in there with the way he is filled with a micro skirt. if he drops a pencil in front of

those kids -- >> come on. >> how dare you pretend to not know what i'm talking about? do you want to be that cavalier with your children? megyn: mercedes, i will give you the final word. >> these are the same impressionable minds that probably watched a soap operas that have the same nudity. these are kids that can learn a lesson from this. this is a world made of many individuals. megyn: they are pretty young. >> when i first saw this, i thought, robert plant has become the mayor. megyn: thank you very much. the mayor has no case for b ias. he is the one that violated the dress code. trying to look like a woman

means following all the roles that women must follow. in this town, that means dressing appropriately for public events as spelled out in the city code. the rules apply to all of us. in forcing them does not make mayor stu rasmussen a victim. bill: we are watching as the senate judiciary committee gets ready to vote for president obama's pick for the supreme court. and students want to know which colleges made this list and so do the parents, but for very different reasons, next. .

megyn: classic clip from "old school." it is that time of year again. the list of party schools by the "princeton review." #1, penn state university, as usual. congratulations, partyers. second, the university of florida. go gators. rounding out the top three -- the university of mississippi, down and oxford, mississippi. you find it hard to believe that shepard went to a party school? he is very well connected in oxford, mississippi.

rock on. byrd the attorney general is announcing federal funding in the city of philadelphia for law enforcement. they are up an arm because the big apple is not on the list. rick leventhal has a full report on this from new york. thousands of local agencies applied for aid, about 1000 were approved. why the disparity? >> there was not enough money to go around for all the people who needed it. philadelphia getting enough money to create or keep 50 law enforcement jobs, so they are a big winner. rochester, n.y., 630 jobs, and kalamazoo, mich., gets to cover the 30 officers. seattle, whose department was tested in 1999, making almost 600 arrests, and new york city,

considered the no. 1 terrorist target in america, gets nothing from the program, sparking outrage from commissioners to mayors and other officials. bill: we have been the target of international terrorism twice. why would we not get the money? >> the department feels is being punished for success. major crime is down 14% over the last couple of years, and there has not been another attack since 9/11. the officer did receive $29 million from a different stimulus program earlier this year, and the budget is relatively stable, but new york says they need help. houston and pittsburgh were shut off, too, and there was only $1 available for every $8 requested. not enough to door around. -- not enough to go around. bill: it is tough, with the economy down. thank you, rick. megyn: a lot of email on that

"kelly's court." bill: what if he changed his name? megyn: he said he identifies heterosexual and even has a girlfriend. he just wants to look like a woman. do not judge. bill: that is wrong, as he would say, on so many levels. live at the base where our soldiers learn to take down the biggest killer of u.s. troops in iraq and afghanistan. (announcer) the same rapid response you expect

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